Fox Business guest: Trump's plan for “reciprocal tariffs” may result in “the worst performance by the US economy — excluding trade — since the COVID recession”
Published
Citation
From the March 5, 2025, edition of Fox Business' Varney & Co.
STUART VARNEY (HOST): Last night, President Trump reiterated his plan to impose reciprocal tariffs, and that would be on April the 2nd.
...
VARNEY: OK. We've already got some tariffs already imposed. More coming April the 2nd. Is that inflationary?
JOHN LONSKI (GUEST): The tariffs we have right now are going to boost price inflation. They've already pushed the price of steel higher, by 30% since the end of January. Price of lumber futures are up by 20%. So, that would mean higher prices for those many products that use steel or that use lumber, especially in the construction industry. And if you look at it closely, the two industry groups that are getting clobbered, in terms of stock price performance, have been the home builders as well as the auto industry. They're getting banged up pretty badly.
VARNEY: Because the stuff that goes into building a house or building into a car, you're in trouble.
LONSKI: Exactly. And plus, you know, automobiles — the manufacture of automobiles is very much cross-border between the United States and Canada, the U.S. and Mexico. It's an absolute mess. And if I was a consumer, would I buy a car anytime soon? No, because I would make the assumption that this jump in tariffs, this problem in trade will be temporary, and once it's over, the price of automobiles will move lower. It's not only inflation I'm worried about, it's also going to be the loss of consumer spending, real economic activity. Those many workers whose jobs depend upon getting imported materials.
VARNEY: That was my next question. I'm going to pick an arbitrary time frame. One month, for example. If we've got this trade fight and the tariffs and they continue for one full month, what's the impact on the economy?
LONSKI: It's very bad. I think even if we set aside what's going on with the trade deficit, you're going to get a big increase in the trade deficit in the first quarter because all of these companies tried to push forward the imports before the tariffs took effect, OK? So you'll probably look at a drop by real GDP. It's what happens in the rest of the economy — there I would expect little, if any, growth. I would expect the worst performance by the U.S. economy — excluding trade — since the COVID recession.
VARNEY: Ouch. How about that?